Capped Plea Discounts and Prosecutorial Resources: A Multilateral Model of Plea Bargaining Under Asymmetric Information

Abstract

This paper analyzes a multilateral model of plea bargaining with asymmetric information to investigate how prosecutorial resources affect the welfare implications of capped plea discounts. A plea discount is a reduction in sentencing that a defendant receives in exchange for pleading guilty. I find that the introduction of a prosecutorial resource constraint reverses the effect capped plea discounts have on the welfare of innocent defendants. When the prosecutor is able to try all of her defendants, capped plea discounts leave all parties weakly worse off. On the other hand, when the prosecutor lacks the resources to try all of her defendants, capped plea discounts may increase the welfare of innocent defendants. This result is notable because the legal debate about capped plea discounts is primarily concerned with the welfare of innocent defendants. Additionally, the improvement for innocent defendants does not necessarily indicate an improvement for all defendants, as capped plea discounts may simultaneously help the innocent and hurt the guilty. Given that prosecutors face severe resource constraints, I suggest that these findings not only illustrate the theoretical implications of limited prosecutorial resources for plea bargaining reform but also provide game-theoretic support for the institution of capped plea discounts.